Larry Kudlow and his guests made a sweeping case on Fox Business on Wednesday that the United States is entering a historic industrial expansion powered by artificial intelligence, data centers, tax incentives, and deregulation.
Economist Steve Moore went furthest, calling it “the biggest industrial boom in the history of the United States” and forecasting as much as $7 trillion in AI and data center investment over the next 25 years.
America’s Upcoming $7 Trillion Industrial Boom
Kudlow opened with a sweeping claim: “Manufacturing up again, computers, electronics, other high-tech growing better than 20%, business equipment investing, capex nearly 10%, the Trump economy is booming.“ He pointed to import prices falling for a second straight month and cited the Atlanta Fed marking up third-quarter GDP to 4% as evidence.
Steve Moore went further. “This is the biggest industrial boom in the history of the United States,” Moore said, comparing it to the era of steel mills, coal, and autos.
Could AI Create 3 Million $100,000 Construction Jobs?
Moore projected “$6-7 trillion dollars of additional spending over the next 25 years on AI and data centers,” with a potential $3.5 trillion windfall and 2-3 million new construction jobs at approximately $100,000 annually.
“These are all union workers,” Moore added, saying that is “one of the reasons we call Donald Trump the blue-collar President.”
It was argued that perhaps the higher inflation numbers we’re seeing are due to increased industrial spending: “The extension of the tax bill, you had the immediate expensing of both equipment and factory construction, and then plus the deregulation. The Biden Administration did not want artificial intelligence. They were fearful of it.”
What the Data Shows
Federal data supports parts of the story and complicates others. Bureau of Economic Analysis figures show manufacturing value added at $3,000.4 billion in Q1 2026, or 9.4% of GDP, growing 1.3% in the quarter. Aggregate manufacturing growth is modest, though corporate profits tell a stronger story: manufacturing sector profits hit $773.3 billion in Q1 2026, the highest in the five-year dataset, up 12.8% year over year, with durable goods profits reaching $452.9 billion. Information sector profits climbed to $352.5 billion, also a record.
Labor market data show unemployment at 4.1% in July 2026, with total nonfarm payrolls at 158.858 million and average hourly earnings of $37.62, up from $36.47 a year earlier.
Are Rising Treasury Yields a Warning Sign or Actually Bullish?
Kudlow took a provocative stance on Treasury yields. “Long-term Treasury securities have been rising, but it is not an inflation scare. It is real capital returns from the strong economy,“ he said. In theory, one could argue that rising demand for capital to fuel investments would lead to higher interest rates, reflecting an optimistic view on investing rather than a disdain for Treasuries themselves. The 10-year yield closed at 4.72% on August 17, 2026, sitting in the 98.8th percentile of its 12-month range, up from 4.30% a year earlier.
Other market voices read the same data differently. On the same day, Bloomberg’s Ven Ram attributed the surge in the 30-year yield to AI capex demand colliding with widening U.S. deficits, generating a fresh risk premium. Mohamed El-Erian has argued for months that AI capital spending would eventually strain the bond market.
Key Takeaways
Record profits in durable goods manufacturing and information services provide tangible evidence that the AI buildout is already benefiting American companies.
The harder question is whether that strength amounts to the largest industrial boom in U.S. history. Overall manufacturing growth remains modest, the economy slowed in the second quarter, consumers are facing higher fuel costs, and long-term Treasury yields are flashing either stronger expected returns or a growing deficit-driven risk premium. The reindustrialization story is real, but its ultimate size, employment impact, and effect on the broader economy remains to be seen.
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